Whether you’re looking at your own limited company set of accounts, those of a competitor, or just being nosey about someone else’s, analysing company accounts is a really useful skill. One of the prices to pay for having limited liability being that accounts have to be published at Companies House and these are readily available. The amount of information that can be deduced from them varies depending on how the accounts are prepared. In this blog post we take a look at the different account filings for small companies and how to analyse these.

What accounts will a small company file?
The legal minimum a company has to file is determined by the company size thresholds in law, which in themselves can help with analysing the size of a company. A small company will likely file either Mirco Company Accounts under accounting standards FRS105 or Small Company Accounts under accounting standards FRS102s1A and there are size criteria dictating eligibility. These size thresholds are changing for accounting periods starting after 6 April 2025 so we’ve detailed what they are at the time of writing (January 2025) and what they will be post 6 April 2025:
Micro Entities | Currently | After 6 April 2025 |
Turnover | Up to £632,000 | Up to £1m |
Gross assets | Up to £316,000 | Up to £500,000 |
Average number of employees | Up to 10 | Up to 10 |
For a company to be able to file micro entity accounts it must meet at least two of the above three criteria. However, filing micro entity accounts is optional and some companies will optionally file under small company accounting standards (FRS102s1a) – so you could still be looking at a qualifying micro entity even if they have filed as a small company.
Small Companies | Currently | After 6 April 2025 |
Turnover | Up to £10.2m | Up to £15m |
Gross assets | Up to £5.1m | Up to £7.5m |
Average number of employees | Up to 50 | Up to 50 |
For a company to be able to file small company accounts it means it must meet at least two of the above three criteria.
What can I tell from a set of company accounts at Companies House?
At the time of writing, companies qualifying as either micro or small can file what are referred to as filleted accounts. This means that they do not file a copy of the profit and loss report (the one which would detail the sales, expenses and the profit), and instead file the balance sheet only – the one that shows all of the assets and liabilities the company had at the accounts date. Legislation has been tabled to change this and make every company file a summary profit and loss report, however this has not been enacted and even when it is Companies House have powers to over-ride this – so at the time of writing it is not clear when or even if this will be a requirement going forwards.
The exact amount of analysis you can do on a set of filleted accounts filed at Companies House will depend on whether they are micro (accounting standards FRS105) or small company accounts (accounting standards FRS102s1a). If you are already familiar with what makes up a set of accounts you can jump to our top tips here.
Analysing a set of micro entity accounts
If accounts are a micro entity set they will above the directors signature on the balance sheet have words to the effect of “these accounts have been prepared in accordance with the micro entity provisions…”. The first thing you will know if they are micro entity is that the company must have met at least two of the criteria listed above in that year.
The amount you can interpret from micro entity accounts is less than those of a small company, however we have listed the different lines you may see on the balance sheet report and what these mean:
Fixed assets – this will be the value of things such as plant and equipment, machinery, company vehicles, fixtures and fittings, website etc. It will also include the value of any investments the company holds. These are generally assets which will be harder to convert to cash.
Current assets – this will include the value of any debtors (customers owing the company money), bank balances, loans made to employees etc. These are assets which are either already cash and/or more easily converted to cash.
Prepayments and accrued income – this will either be the value of sales made at the accounts date that had not yet been invoiced, or the portion of an expense that was incurred before the accounts date but relates to after it.
Creditors: amounts falling due within one year – these are amounts the company owed at the accounts date and would be payable within the next 12 months. This will include items like trade creditors, bank overdrafts, bank loans (the part due within a year), corporation tax etc.
The total assets less the total liabilities will net down to what is called “net assets”, or if the liabilities are greater than the assets then it will be “net liabilities”. If a company has net assets then it is solvent at the accounts date, i.e. the assets they have are bigger than their liabilities. If the company has net liabilities at the accounts date then it was not in a position for the company to settle all of its liabilities. That is not to say that it won’t, but just that it couldn’t at that time. Sometimes included within either short term or long term creditors will be money that the director(s) have loaned to the company, and they are more likely to be flexible when it comes to being paid back. However if a company continues to trade when it has net liabilities then it needs to do so with caution as if things get worse the directors can sometimes be held liable for the increased debt.
Micro entity accounts do not have to give a breakdown of any of these assets or liabilities which prevents any further analysis.
Analysing a set of small company accounts
As you would expect there is a bit more detail required in small company accounts using accounting standards FRS102s1A, and so equally there is a bit more we can tell. We run through the common lines on the balance sheet report but also highlight where additional notes to these will give even more detail:
Tangible assets – these will be the value of things like plant and machinery, company vehicles, office fixtures. You should see reference to a further note number on this line, and that note will break down the value of tangible fixed assets across these asset types. Within the accounting policies the accounts will also tell you the rate of depreciation they are using for each asset type.
Intangible assets – typically things such as goodwill that may have been paid when a business or trade was acquired. Again, a note will be applied to this line which will give you more detail on what makes it up, and the accounting policies will detail the rate of amortisation used (amortisation is the equivalent of depreciation but is on intangible assets instead of tangible).
Investments – these may be listed investment (e.g. shares in a company on the FTSE 100) or unlisted investments (for example an investment in another group company).
All of the above three represent assets that would be harder to convert to cash, and although should be shown at appropriate value, sometimes it is generally harder to be as accurate with these than it would be to value the amount of money customers owed the business at the accounts date.
Debtors – this area will contain things like amounts customers owed the company at the accounts date, the value of expenses paid in advance etc. Again, the accounts will provide a note to give a further breakdown, although this typically only shows the trade debtors (amounts customers owed) separately and everything else is then shown in “other debtors”.
Cash at bank – pretty self-explanatory this one and is simply the balance in the bank at the accounts date with allowance for any uncleared deposits or cheques written not cleared.
Creditors: amounts falling due within one year – this will be made up of the type of items listed for micro entities above, however under FRS102 s1A the accounts will have a note which will give a breakdown of the total balance. This can be very useful for seeing if a company has a high balance of loans, if some/all of the company fixed assets are on hire purchase, and it will sometimes detail out the exact balance owed in corporation tax (see the tips section later in this blog).
Creditors: amounts falling after more than one year – these are those longer-term amounts owed which are typically loans (the remaining part after allowing for what will be paid within a year), mortgages etc.
Tips for analysing company accounts
- Sometimes a set of accounts will show net assets (i.e. that they are solvent), however there is a loan that a director owes the company. The recoverability of such a loan may be questionable if the business fails, particularly if the loan represented amounts withdrawn that could not be covered by dividends. If there is an overdrawn directors loan (the director owes the company money) then in both micro and small company accounts it has to be disclosed. If this is the case you can deduct the value of the loan from the net assets and see if it would still be solvent.
- Both micro and small company accounts should disclose the average number of employees. So if they show they had an average of 12 employees for the year ended 31 December 2024 but they have filed micro entity accounts then their gross assets (fixed assets + current assets) were less than £316,000 and their turnover was below £632,000.
- Although in a small company set of accounts the creditors note might show the corporation tax owed, this can only be used as a very rough guide as to what profit they might have made. This is because the corporation tax figure could be affected by things like assets purchased, overdrawn directors loan accounts, or even that they didn’t clear all their prior year corporation tax.
- Always look to see if there are other companies either within the group or commonly owned by the director/shareholders. This is how you can use Companies House to check for such things:
To check if the company is owned by a parent company, in the Companies House account you can click on “people” and then click on “persons with significant control” as shown below:
This will then tell you if there is a company which owns shares in it. If the company you are looking at holds shares in another and files accounts as a small company, then on the balance sheet you should see a line for investments. This won’t tell you the name of the company, but you can use the method below to try and trace the company concerned.
To check for other companies the directors may be involved with you can click on “people”, then “officers” then click on the relevant director and it will show other companies they are involved with.
The reason to do this is that it can be important if there are amounts owed between these companies. For example, if company A is showing net assets of £10,000, but is owed £50,000 by company B and company B is either in a net liability position or mainly has fixed assets that would be difficult to sell then company A’s trading position is potentially not as it first seems. - The old saying “cash is king” still applies. If you are comparing the accounts of two small companies, with both showing the same net asset figure but one having very little cash at the bank and owning a lot of fixed assets, and the other with high cash balances and hardly any fixed assets, then the second company will likely be able to transition and react more quickly than the first.
- Remember that accounts published at Companies House are always historic. Companies are usually required to file accounts within nine months of their year-end or 21 months after incorporation, so the information you are looking at could be quite out of date. Companies, just like people, have a credit score. If you are already transacting with a company or thinking about trading with them, you may wish to run a credit check on them. There are many providers of this facility such as Experian, Dun & Bradstreet etc who use both the latest set of accounts plus details provided by finance providers, existing customers/suppliers etc to provide a score for the company. On many you can set up an account and upload details of your customers and/or suppliers and they will alert you when there is movement in their score.
- The section. of the Companies House housing all the company accounts and details can be found at:
https://find-and-update.company-information.service.gov.uk
At Veritons we always have both a pre and post year end meeting with clients to talk them through their accounts to give them knowledge of exactly what their position is and what the accounts reflect. This not only arms them with the knowledge of how to move forward but also gives them the skills to better analyse both their and others accounts. To us it is vital that clients understand their business accounts so they can make the right, informed decisions. If this is something you feel could benefit your business reach out to us by clicking the button below and filing out our contact form.